On Competition and the Strategic Management of Intellectual Property in Oligopoly
AbstractAn innovative firm chooses strategically whether to patent its process innovation or rely on secrecy. By doing so, the firm manages its rival’s beliefs about the size of the innovation, and affects the incentives in the product market. Different measures of competitive pressure in the product market have different effects on the equilibrium patenting choices of an innovative firm with unknown costs and probabilistic patent validity. Increasing the number of firms (degree of product substitutability) gives a smaller (greater) patenting incentive. Switching from Bertrand to Cournot competition gives a smaller (greater) patenting incentive if patent protection is weak (strong).
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Bibliographic InfoPaper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2009_13.
Date of creation: Apr 2009
Date of revision:
Bertrand and Cournot competition; oligopoly; product differentiation; entry; asymmetric information; strategic disclosure; stochastic patent; trade secret; process innovation; imitation;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-BEC-2009-05-02 (Business Economics)
- NEP-COM-2009-05-02 (Industrial Competition)
- NEP-CSE-2009-05-02 (Economics of Strategic Management)
- NEP-CTA-2009-05-02 (Contract Theory & Applications)
- NEP-IND-2009-05-02 (Industrial Organization)
- NEP-INO-2009-05-02 (Innovation)
- NEP-IPR-2009-05-02 (Intellectual Property Rights)
- NEP-MIC-2009-05-02 (Microeconomics)
- NEP-TID-2009-05-02 (Technology & Industrial Dynamics)
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- Christian Traxler, 2009.
"Majority Voting and the Welfare Implications of Tax Avoidance,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods
2009_22, Max Planck Institute for Research on Collective Goods.
- Traxler, Christian, 2012. "Majority voting and the welfare implications of tax avoidance," Journal of Public Economics, Elsevier, vol. 96(1), pages 1-9.
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